Gallelli MARKET REPORTS
Vacancy for shopping center space in the Sacramento region stood at 8.1% as of the end of Q2 2026, reflecting a slight uptick from the revised 8.0% rate recorded three months ago. It also reflects an increase from the 7.9% rate of a year ago. While the market recorded 135,000 square feet (SF) in positive net absorption, this number was surpassed by 176,000 SF of new product that came online, which drove vacancy up modestly. However, most of this vacancy remains concentrated in the region’s Class B and C properties. Our brokers continue to report limited space availability across the region’s Class A properties, where we estimate vacancy to be closer to 5.0%.
Q1 Report Q2 Report
As of the close of Q3 2024, overall shopping center vacancy in the Sacramento region stood at 7.6%, down slightly from the 7.8% rate of three months ago. One year ago, this metric stood at 7.9%. The market recorded positive net absorption of 96,000 square feet (SF) in Q3. Occupancy growth has remained in positive territory in two of the past three quarters, with the market having absorbed 221,000 SF of product year-to-date.
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As of the close of Q4 2023, overall shopping center vacancy in the Sacramento region stood at 7.9%. While this reflects a modest decline from the 8.0% vacancy rate of three months ago (Q3), this metric climbed over the course of 2023. One year ago, local vacancy stood at 7.5%. Yet, the trend has played out unevenly. Just five of the region’s 14 submarkets ended 2023 with increased vacancy levels.
Q4 Report Q3 Report Q2 Report Q1 Report2022 was another strong year for retail commercial real estate in the Sacramento region with an overall vacancy rate at 7.7% to close out the 4th quarter. With continued robust demand and nominal new construction, we have experienced positive net absorption and a relatively tight retail market. Despite Federal Reserve rate hikes, consumer spending in the region was still strong with retailers overall performing well in 2022.
Q4 Report Q3 Report Q2 Report Q1 ReportAs of Q2 2026, office vacancy in the Sacramento region stood at 16.2%. Leasing activity in Q2 remained subdued, with the market recording only 544,000 square feet (SF) of total deal activity (gross absorption). This reflects a significant slowdown from the 885,000 SF of total deal activity we tracked in Q1. Those deals at the start of 2026 were enough to translate into modest positive net absorption (+81,000 SF) and a modest decline in overall vacancy (from 16.3% to 16.2%). This did not occur in Q2 with most leasing focused on renewals, relocations or downsizing translating into flat occupancy growth.
Q1 Report Q2 ReportAt the close of Q3 2024, office vacancy in the Sacramento market stood at 16.8%. This reflects an increase from the 16.4% rate recorded just three
months ago with the increase driven primarily by a few key large space givebacks from the region’s largest office tenant, the State of California.
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Since the first quarter of 2020 (when the pandemic spread across North America), the Sacramento office market has recorded positive net absorption in just three of 15 quarters. The first time this occurred was in Q3 2020, when the market recorded a modest 43,000 square feet (SF) of positive net absorption—largely due to space users occupying space from deals that largely had been in the works since before the Covid crisis outpacing the trend of space givebacks that, at the time, had only just begun.
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As of the close of Q4 2022, overall office vacancy in the Sacramento region stood at 14.9%. This reflects an increase from the 14.5% rate posted three months ago and the 13.9% level recorded one year ago. The market recorded 257,000 square feet (SF) of negative net absorption in Q4.
Q4 Report Q3 Report Q2 Report Q1 ReportAs of the midyear 2026 mark, industrial vacancy in the Sacramento region stood at 7.5%, after two consecutive quarters that had seen this metric on the upswing. It is not uncommon for us to revise these numbers as more information becomes available to our analysts. Typically, this is due to late responses from market participants to our quarterly survey of more than 3,900 properties across the region or deals closing at the end of quarter.
Q1 Report Q2 Report
At the end of 2025, industrial vacancy across the Sacramento market stood at 7.4%. This reflects a slight uptick from the 7.2% rate that was in place just three months ago, and a more substantial increase from the 6.5% rate of a year ago. Vacancy inched upward in three of four quarters in the past year, driven by both an increase in availability (both direct and sublease), and the impact of new
construction.
Industrial vacancy in the Sacramento region increased slightly from 6.1% to 6.2% in Q3 2024. The market recorded -176,000 SF in negative net absorption over the past three months. Deal activity (gross absorption) picked up slightly in Q3. We tracked just over 2.1 million square feet (MSF) in total transactions, up from 1.9 MSF in Q2. Despite this, a few major space givebacks in the Davis/Woodland submarket outpaced occupancy gains elsewhere to tilt the market into the red.
Q1 Report Q2 Report Q3 Report Q4 ReportAs of the close of Q4 2023, industrial vacancy in the Sacramento region stood at 5.9%. This reflects a substantial uptick from Q3’s recorded rate of 4.6%. Developers added more than 2.0 million square feet (MSF) of space in Q4,
making this one of the strongest quarters for new construction that the market has ever experienced (there are only four occasions in the past 25 years in which more than two million square feet of new product came online in a single quarter).
As of the close of Q4 2022, total industrial vacancy in the Sacramento region stood at just 4.0%. While this reflects a slight uptick from the 3.8% mark of three months ago and a more substantial increase over the 3.5% reading of Q4 2021, it still reflects an incredibly tight marketplace.
Q4 Report Q1 ReportMultifamily vacancy in the Sacramento region stood at 6.4% as of the close of Q2 2026, down from the revised 6.5% reading of three months ago, though still elevated from the 6.2% rate posted a year ago. Vacancy had been on a steady upward trajectory since hitting a local record low of just 3.0% in Q2 2021. Against this backdrop, the Sacramento multifamily market recorded aggressive rental rate growth, posting 10.5% growth by Q3 2021 (the highest level we have on record since we began surveying the market in 2000).
Q1 Report Q2 ReportAs of the end of Q3 2024, multifamily vacancy in the Sacramento region stood at 6.1%. This reflects a slight uptick from the 5.9% rate posted just three months ago. This increase in vacancy comes even though the market posted increased positive net absorption in Q3. Multifamily occupancy increased by 1,069 units in Q2, with occupancy growth increasing 17.5% to 1,257 units in Q3.
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Multifamily vacancy in the Sacramento region climbed over the final three months of 2023 to 6.7%, up from Q3 2023’s revised reading of 6.2%. One year ago, this metric stood at 5.9%, but vacancy increased in all but one quarter in 2023. Since reaching a local record low of 3.2% in Q2 2021, vacancy has inched up in eight of the last ten quarters. But as distressing as a three-year trend of increasing vacancy may sound to some, it is critical to note that typically multifamily vacancy
in the 5.0% to 7.0% range is considered healthy.
Apartment vacancy in the Sacramento market posted its sixth consecutive quarterly increase during the final three months of 2022, closing the year at 6.7%. Our data only tracks competitive multifamily projects with a minimum of 25 units and does not include smaller complexes or fourplexes, nor does it include senior, student, or Section 8 housing.
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